Fantastic Seller’s Market Offers Best Prices In Years
Posted by Richard on October 7, 2020
The millennial generation has grown up and they want to buy homes.
Every year for the next 10 years, millions of millennials will hit home buying age. The average age of a millennial is 32. The average age for home buying is 31, according to ETF Trends.
No wonder there is a record boom in buyers and potential buyers.
Available Housing Down
While there are lots of buyers, there are fewer homes for sale. That adds up to a supply and demand formula that puts sellers comfortably seated in the parlor, taking offers.
Half of the buyers who purchased a home in the last three months were forced into a bidding war, according to internet real estate company Redfin, as the average home sale price spiked 6 percent. That equals 100 straight months of price gains, according to the National Association of Realtors.
It isn’t just millennials who are buying these days, either. A new wave of city dwellers from cities like New York are looking to the suburbs to escape violence and lock-downs. In July, there was a 44 percent increase in suburban home sales and in some cases, homes sold for prices that were as much as 21 percent over list, according to The New York Times.
Home Builders Busy
With this reality in mind, home builders are busy. New home starts jumped to their highest level since 2006. Housing starts increased 17 percent in June. Nearly six in 10 home builders have raised their prices, according to CNBC.
More Houses Built
Privately-owned housing starts in July zoomed up 22.6 percent above estimates and 9.4 percent above July 2019, according to the Census Bureau.
The number of completed homes was up 3.6 percent above estimates in July. That was 1.7 percent higher than the June 2019 rate.
COVID-19 lock-downs impacted housing starts in March, which were at their highest level since 2006. But starts have rebounded.
For home investors, the robust nature of the housing market should offer some safety for the next few years, according to Stephen McBride of ETF Trends.
In addition, real estate brokerage Redfin reports prices of rural homes are increasing as the number of homes for sale falls.
That means the trend of people leaving urban areas for suburban and rural areas is continuing. The median sale price of homes in rural areas increased 11.3 percent year-over-year in the four weeks ending Aug. 2. In suburban areas, prices rose 9.2 percent. Homes in urban areas had a smaller home price increase at 6.7 percent.
Meanwhile, the number of homes for sale in rural areas went down 37.9 percent year-over-year. Homes for sales fell 31.8 percent in the suburbs and declined 21.3 percent in urban areas for the year-over-year period ending Aug. 2.